This research examined parastatals and business enterprises in Nigeria with a view to establishing if the Nigerian government needs to be involved in business or productive ventures. The emerging popularity of state capitalism begs for continuous involvement of the Nigeria government in the establishment of enterprises. However, past experiences point otherwise. The aim of the researcher was to establish implications for state capitalism, spillover effects, and causes of failed government public enterprises in Nigeria. Using the agency and theoretical orientation theoretical frameworks, and systematic review of literature, nine (9) government owned enterprises were analyzed. These included NITEL, NNPC, Ajaokuta Steel Company, ALSCON and others. It was revealed from the analysis that with the rate of failure of Nigerian government owned enterprises, state capitalism may not be feasible in the country. Also, that the major causes of the failure of these enterprises include mismanagement, corruption, poor business practices and government interference. It was concluded that there is still a chance for the Nigerian government to be in business, given the successes recorded in other countries. Recommendations made include the need to eliminate corruption, as well as the appointment of non-professionals as managers, and the adoption of success business models from countries like United Arab Emirates (UAE), Uganda and China.